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Logan County could benefit from Rural Jump-Start program

Program offers tax relief to new businesses

Logan County has a chance to bring new businesses to the area. Trae Miller, executive director of the Logan County Economic Development Corporation, spoke with the commissioners about a new Rural Jump-Start Zone Tax Credit program during a work session Tuesday.

Miller explained the Rural Jump-Start program is a pilot program that is rolling out across the state. In 2016, it will be tested in three pilot communities and in 2017 all rural counties with a population less than 250,000 can apply. So far one county has applied to be a pilot, Mesa County.

The program is based on Senate Bill 15-282 and is jointly administered by the Colorado Office of Economic Development and International Trade, the Colorado Economic Development Commission and the Colorado Department of Revenue.

It offers relief from state income taxes for the new business, relief from the state and county sales and use tax for the business, relief from county and municipal business personal property tax and relief from state income taxes for the employees for a four-year period.

Before anything can be done the county must pass a resolution to agree to participate with the tax exemptions and rebates and to be part of the program. Miller noted even if the county does pass a resolution there's no guarantee it would be awarded the program this year.

Rocky Samber clarified that with the passage of the resolution it does not commit the city or other incorporated municipalities in the county, they would have to apply on their own. It just allows the county to apply to have a Jump-Start program.

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Counties applying for the program must have an institute of higher education (IHE) that is willing to work with them; for Logan County it would be Northeastern Junior College. "They really have to be the one that administers the program, they give the final approvals and work with the businesses, as far as the applications, to be part of this program," Miller said.

The county must also have a strong pipeline of potential businesses that could participate in the program. In order to participate the business must be a new business that is not currently operating in Colorado and it cannot be competing with businesses that are already in the state.

Samber asked if the business must bring a certain number of employees. Miller said they must hire at least five new employees and there are requirements for paying above the county wage.

Businesses that apply must go through the IHE that the county is working with and final approval will be given by the Colorado Office of Economic Development.

"The great thing is we retain full control. They're not applying through the state office and through the Economic Development Commission. They apply through NJC, so ultimately we control who gets approved and who doesn't get approved," Miller said.

He told the commissioners he believes Logan County has three or four businesses that are pipeline candidates, though he isn't sure how strong of candidates they are.

Dave Donaldson asked for an example of a business that could apply. Miller said one business he's working with is based in Texas and looking at expanding to this area. It's a manufacturing/machine business related to the feed industry and only four or five other companies in the United States do what they do.

"They would fit because they have a unique product that they're working with," he told the commissioners.

Miller is also working with some hemp businesses that he believes could apply, including one in Nebraska that is working on machinery to separate the fibers from hemp plants.

He said his biggest concern with the program has been the business pipeline that he has and whether it would be strong enough for Logan County to apply for the program, but after conversations with Ken Jensen, from the Colorado Office of Economic Development, he feels Logan County has a good case.

Miller noted that there are many businesses looking to come to Colorado, especially along the Front Range, and if the Jump-Start program is available within Logan County, which is two hours away from the Front Range, "I'm very confidant we can get a lot of folks that want to look out this direction."

"I think it would change the marketability of Logan County in terms of economic development," he said.

The commissioners were given a resolution that Mesa County signed with data regarding regional job growth in Grand Junction and Pueblo. Samber asked for that data for Logan County compared to the state.

Samber also asked about the connection with the IHE and if the college would train the businesses employees. Miller said that is possible, but that doesn't have to be the case.

"They expect there to be a relationship between the two, whether it's a training program for the employees of the business, whether it's they might employ the graduates from the college, or whatever. It sounded like that was a very flexible thing, what that relationship needs to be," he told the commissioners.

County attorney Alan Samber asked if anyone's compared this to the enterprise zone and the tax relief that it offers. Miller said there may be some similarities, "but this is, in my opinion, a much stronger program than the enterprise zone," especially because it's offered to limited counties in the first year, whereas enterprise zones are in communities across the state. "There is very little in terms of a competitive advantage for us with the enterprise zone," he commented.

Miller said he believes businesses can take advantage of both programs.

Donaldson questioned why more counties aren't trying to take advantage of Jump-Start program right now. Miller said Jensen is working with five or six other communities and their enthusiasm goes back and forth. It might be because they're worried about having enough businesses that can apply or because there is some conflict with multiple IHE's in the county.

Miller told the commissioners he believes the program "will give us a great competitive edge."

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